Pension protection

Published  09 November 2022
   3 min read

Lifetime allowance protection

It is currently possible to protect benefits from income tax if they exceed the lifetime allowance. This protection has the effect of locking the lifetime allowance at a certain rate, meaning the reduction won't apply. However, there are conditions which, if broken, will result in protection being lost.

Protecting Pre 6 April 2006 benefits and tax-free cash

Pensions legislation changed on 6 April 2006. However, it was possible to protect existing benefits.

Protecting benefits

It was possible for members of pension schemes set up before 6 April 2006 to protect the benefits that they already had. There were 2 types of protection - primary protection and enhanced protection.

Protecting tax-free cash

Individuals who had a right to more than 25% tax-free cash on 6 April 2006 and who didn't opt for protection (see above) may still have their tax-free cash entitlement protected. This is called scheme specific protection.

Tax-free cash protection on transfer

Protecting tax-free cash on transfer is, and always has been, one of the most popular queries we receive. More specifically, what happens if an individual who is entitled to tax-free cash of more than 25% is transferring to another plan?

Our frequently asked questions

Here we look at some of the questions we are asked most often. 

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